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What is everyone doing to pay off their mortgage quicker?


smokin5s

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Looking at what the bank makes in interest every year and the fact that you could buy your house 3 times by the time the loan is paid back, what is everyone trying to do to pay it off quicker? I've seen a ton of different things that people say to do in order to pay your mortgage off in sub 10 years, but all of them just seem like silly schemes. Anyone with real experience?
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Overpay monthly. Anything more than you are supposed to pay goes directly to the principle. You would be surprised how much it helps.

 

This, particularly if you can do it in the earlier years of the loan it makes a big difference.

 

Also, refi to a shorter term/lower rate when possible to "jump ahead". For example, 30 year @ 4%, you've been paying for 8 years (22 years left w/o "overpayment"). Refi to 15 year @ 3.25% and cut 7 years and again, pay extra when possible.

 

Excel has a "mortgage amortization" sheet prebuilt. Load your info and print/save to see exactly how principal & interest change over the life of the loan.

 

And yes, mine is paid off!

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Looking at what the bank makes in interest every year and the fact that you could buy your house 3 times by the time the loan is paid back, what is everyone trying to do to pay it off quicker? I've seen a ton of different things that people say to do in order to pay your mortgage off in sub 10 years, but all of them just seem like silly schemes. Anyone with real experience?

 

way back when we started by simply paying-up by a couple hundred bucks. IIRC our mortgage was $900 and we paid upwards of $1,100mo. Then we started making an extra 1-2 extra f those payments per year. we then moved to paying 4 per year, etc. just save up as much as you can when you can and make the payments towards the principle. At some point we made 2x payments.

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I believe if you pay one extra (full) payment a year on a 30 year amortization you can cut up to 5-8 years off the note depending on what your rate of interest is.

 

Use your tax return to give you your extra note.

 

Also as others mentioned, refinancing down from 23-22 years to 15 may have similar payments with todays interest and chop years aways! ARM notes are not a horrible option either to be honest, they have 15 year fixed arms at lower rates which will save you over the first 15 years, if you are savy you can either pay it down/off or re fi and accumulate savings before the adjustment takes place.

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I don’t think it’s worth going crazy over if you have a good rate. But I switched to a 15 year a few years back and have always rounded up to the next hundred on my payment so both those help quite a bit.
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I don’t think it’s worth going crazy over if you have a good rate.

 

Agree to an extent but it's not just about the rate, it's about the amount of money being paid over 2-5 years just in interest alone.

 

Build up equity and borrow from yourself to invest in rentals and in a few years you'll be making money with your money as it should be.

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Agree to an extent but it's not just about the rate, it's about the amount of money being paid over 2-5 years just in interest alone.

 

Build up equity and borrow from yourself to invest in rentals and in a few years you'll be making money with your money as it should be.

 

Cash on Cash return.

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so when everyone says they pay over, do they pay like 100 over or do they pay the whole payment over? Also how in the world do you guys have such low mortgages? I pay almost 1,600 a month.

 

When you pay over, do you have to tell the mortgage company every month to apply to principal or are they smart enough to automatically do it?

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If you pay biweekly (basically 13 payments per year), it'll shave 7 years off a 30 year loan.

 

My mortgage is like $646/mo with taxes and interest and I pay $750. 2 years ago it was like $735/mo then I refinanced from a 5% loan to 3.875. I took out about 5k for new windows and doors and even paying the same $750, it'll be paid off quicker than if I kept the 5% loan. I think what I calculated was that I'll pay it off this new 30 year/3.875 mortgage in 21 years at this rate, where I would have still had 23 years left on my old mortgage.

 

And I got new windows and doors. Sounded like a win-win to me. Marc did me well.

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Looking at what the bank makes in interest every year and the fact that you could buy your house 3 times by the time the loan is paid back, what is everyone trying to do to pay it off quicker? I've seen a ton of different things that people say to do in order to pay your mortgage off in sub 10 years, but all of them just seem like silly schemes. Anyone with real experience?

 

Honestly the fact your asking "how" shows your pretty motivated to get it done early,the rest is just math,pay as much every month/year and 30 yrs becomes 15 pretty quickly.

 

We did ours in 11 yrs and its motivating enough where the sacrifice doesn't seem like one at all.

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I find it interesting that people think keeping debt and paying insane monthly payments is a better answer to not having that debt...

 

The part I'm also having a hard time understanding. You can get a 7 year loan on a Tesla that's 100k and pay $1,2xx a month on it and pay it off... Why am I paying more and not paying off that amount as quickly? The way that mortgages handle the interest is the problem. They have you pay off the interest first before principal really gets affected... To me, that should be illegal. I think it's called amortization.

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Most people move every 3-7 years. Most people on CR keep cars for how many months? 24-36? most cars and homes never get paid off...get the lowest payment you can in this climate and invest. When rates are over 6...pay off the mortgage first...
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been 8 years, I'm still at my house with no interest in moving. I do drive a 2016 car but I also own a 1996 and 1997 cars as well... so... I might not really fit into the category of most people. :-) Plus not having that mortgage payment always sounds like a good idea. I'm also a guy who pays off his credit card at the end of every month and just uses it for points.
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been 8 years, I'm still at my house with no interest in moving. I do drive a 2016 car but I also own a 1996 and 1997 cars as well... so... I might not really fit into the category of most people. :-) Plus not having that mortgage payment always sounds like a good idea. I'm also a guy who pays off his credit card at the end of every month and just uses it for points.

 

I'm with you. I understand the thinking that has been talked about in this thread, but we have 4 of our 5 cars paid off. We have basically gotten out of debt with the exception of the house. I like the freedom that gives us financially so as things progress I'll be doing the same thing paying more towards principle. I'd rather have freedom then a bunch of debts to manage. This goes along with the way people look at retirement, do you want a 401k relying on the market thinking your money with grow faster, or do you want your retirement in gold and bonds that is much more of a sure thing.

 

Maybe it's old school versus a more modern outlook, I don't know because I'm no expert. I have little interest in buying new cars every few years, or buying another house either. So I suppose that isn't the norm much anymore either.

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